You Invest $1,000 at Age 20 at an Annual Rate

question 36

Multiple Choice

You invest $1,000 at age 20 at an annual rate of return of 12%.By the time you are 62 you will have amassed approximately

• A)$47,040.
• B)$67,214.
• C)$116,723.
• D)$504,000.

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Definitions:

Vehicle Brake System

A mechanism in a vehicle that enables it to slow down or come to a complete stop.

Variance

A statistical measurement of the dispersion between numbers in a data set, indicating how much the numbers differ from each other and from the mean.

Squared Deviation

The squared difference between each data point and the mean, used in statistical analysis to measure variance.

Arithmetic Average Return

The sum of returns in each period divided by the number of periods, often used to calculate the average return of an investment.